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Naperville, Skokie & Cook County Commercial Real Estate Attorneys

M&A Law Firm, P.C. is a legal firm with a strong grounding in commercial Illinois real estate. With an up-to-date, broad-range knowledge of both federal and state real estate statutes, our attorneys can assist you with all matters pertaining to business property -- complex negotiations, drafting, reviewing and enforcing documents, advising you on investment opportunities, and representing you in real estate closings.

At M&A Law Firm, our extensive experience in the field makes us well-equipped to help you make sound choices that will benefit you in the present and protect you in the future. Once you meet with one of our attorneys for a free consultation, we are sure it will become clear to you that we not only have a comprehensive understanding of commercial real estate, but that we are good listeners who will pay careful attention to your particular needs.

Types of Commercial Real Estate

There are many kinds of commercial real estate. Differentiated by their various usages, these include buildings used for:

  • Retail

  • Office space

  • Warehouses

  • Industry

  • Apartments

  • Hotels

Commercial buildings can also be considered “mixed use,” meaning that the buildings house two or more of the above in a single structure. Once you know which type of property you’re looking for, the search begins. As you are no doubt aware, your ability to secure a favorable lease or purchase price depends a great deal on the state of the current market. The more vacancies, the more advantageous for the renter or buyer; the fewer available sites, the more advantageous to the landlord or seller.

Commercial Leases

Whether you are looking to be the landlord or tenant of a piece of commercial property, the commercial lease is extremely significant. Commercial leases differ from residential leases in a number of ways. For one thing, they typically apply for a longer period of time, usually a minimum of 5 years. For another, they involve a larger security deposit. There are advantages to commercial leases over residential leases, since the former give you a great deal more leverage in terms of negotiating power. Nonetheless, there are regulations in place for commercial property that do not apply to residential properties. For example, depending on how public the commercial property is, it may be required to accommodate disabled individuals. The laws vary about such regulations, so this is a place where having a savvy real estate attorney comes in very handy.

Since  M&A Law Firm has a solid background of working with clients on both sides of the table in negotiating leases, we have developed finely honed negotiation skills. We are prepared to target the areas of most important to you, such as:

  • The length of the lease

  • The amount of the rent

  • The security deposit

  • Any necessary modifications to the space

  • The potential for onsite publicity

  • Restrictions of competitive businesses in adjacent premises

  • Which maintenance, waste removal, and utilities each party will be responsible for.

  • Whether there will be potential to expand and lease more space

  • Whether is will be possible to sublet portions of your space

  • Whether the lease is “gross” or “net” (net leases are typically only used by very large companies like CVS or Starbucks)

  • Whether there is an option which allows you to rent with an option to buy

Our attorneys may know facts you are not aware of, for example that landlords can include the thickness of walls, stairwells and even elevator shafts in their computation of square footage. A knowing attorney will make sure that you understand precisely what the area measurements you are given mean.

At M&A Law Firm we take into account all aspects of the landlord/tenant relationship, from negotiating to drafting and reviewing documents to clarifying issues such as which party is responsible for damage and repair of the premises. We are committed to making sure that all details in any lease you sign, whether as a landlord or a tenant, are clear and unambiguous, preventing future misunderstandings or disputes. In some cases, a Letter of Intent may be signed before the lease just to demonstrate the commitment of both parties. This can be a useful step in the process, but your attorney will make sure that this agreement is not legally binding.

Reasons to Invest in Commercial Property

While some individuals or companies are looking to lease property to house their businesses, some are looking to purchase commercial property for investment purposes. As our attorneys can explain to you, there are some significant reasons that commercial property is a wise investment:

  • Such real estate tends to have far greater earning potential than residential property (6 to 12 percent as opposed to 1 to 4 percent)

  • Small business owners tend to maintain and improve their properties to attract customers, clients, or patients

  • Because owners of commercial properties are typically LLCs, the landlord and tenant are more likely to work together on a professional level

  • Businesses generally have limited hours of operation so that, as the investor, you are far less likely to be disturbed by middle-of-the-night calls

  • Prices of commercial properties are more likely to be standardized

  • Fewer consumer protection laws govern commercial leases, so negotiations are easier

Triple net leases may also be a strong incentive for investment in commercial property. They are based on the concept that the property owner does not have to pay any expenses on the property. In triple net leases, the tenant handles everything but the mortgage, which is paid by the landlord. This means all of  the property expenses, including real estate taxes, are paid directly by the tenant. Large companies like CVS, Starbucks, and Walgreens are generally managed this way.

U.S. Small Business Association Loans

The Small Business Association (SBA) runs two interesting and progressive lending programs designed to help small, disadvantaged businesses: the Small Business Mentoring Program (SBMP) and the Small Business Federal Program (SBFP). These programs may help you borrow money to invest in small businesses that are at least 51 percent owned by one or more socially and economically disadvantaged individuals.

If you’re interested M&A can assist you by evaluating your eligibility for a Business Development Program loan that may pave the way for a successful investment in commercial property that houses a small business. There are numerous benefits to participating in an SBA lending program, including assistance with specialized business training, counseling, marketing assistance and high-level executive development. It is also possible to obtain access to surplus government property and supplies if you have obtained an SBA-guaranteed loan.

Commercial Real Estate Closings

If you decide to purchase commercial real estate, whether to function as an active landlord or for investment purposes, M&A Law Firm wants to make the sale as seamless as possible. Used to negotiating, drafting, and reviewing contracts, we will see to it that every detail is evaluated and every bit of legalese is clarified so that you feel confident signing the necessary documents. Our attorneys have the wherewithal to make any final adjustments with the seller’s attorney when we represent you at the closing.

Commercial Evictions

Evictions are difficult whether you are the landlord or tenant. Our law practice deals with both large and small commercial evictions. Through extensive experience, we have developed methods that work effectively to process evictions with as much efficiently and as little animosity as possible. We are well aware of the stress caused by a tenant who is failing to keep up monthly payments or who is causing disturbance or destruction to the property you own. You can count on us to resolve the situation as quickly as possible.

Whether we have to file a complaint with the court and serve a summons on the defendant, or have an absent tenant served through the sheriff, a process server, or simply through publication, we will see to it that the eviction is effectively handled. When your eviction case is presented to a judge and proceeds through case management conferences, discovery, or trial, we always try to maintain contact with opposing counsel to see if the case can be settled out of court. In cases where trial is necessary, you can trust our attorneys to fight vigorously to get your property back into your hands and, if possible, to obtain monetary damages.

Tax-Deferred Exchanges

When purchasing real estate for purposes of investment, the intricacies of the tax code have to be taken into consideration. This is one of the reasons it is crucial to engage the services of a competent attorney who knows tax regulations. One of the most important things you can do when investing in real estate is defer payment of capital gains tax. The ability to do this can save you a great deal of money.

Our attorneys at M&A Law Firm are very familiar with Internal Revenue Code §1031. This part of the tax code provides for the “exchange” of “like-kind” property for investment purposes or “for productive use in a trade or business.” This means that you may be able to dispose of property in such a way that you retain more money to invest in your next property.

The most notable aspects of Code §1031 are:

[1] The transaction must be structured as an exchange, rather than as a sale and purchase. You

    need a qualified intermediary to hold the assets resulting from the sale until they are used to

    buy the new property. As long as the appropriate documentation is signed, however, the

    intermediary need not actually take title of the property.

[2] In order to satisfy the legal requirements of an “exchange,” you must sign a number of

    documents, including an exchange agreement, and an assignment of the purchase contract.

[3] The replacement property must be “like-kind” to the relinquished property. The phrase

    “like-kind” means that the two properties must be of similar type.

[4] In order to qualify for tax deferral treatment, the same taxpayer who sells the relinquished

    property must purchase the replacement property, although there are some exceptions

    where limited liability companies (LLCs) and revocable trusts are concerned.

[5] Both pieces of property must be held for investment purposes or for use in the investor’s

    business. Property held for the purpose of appreciation or for rental income usually satisfies

    this requirement. Typical exchange transactions involve offices or commercial buildings,

    rental homes or apartment buildings.

[6] Though there is no precise time requirement for exchange transactions, the investor must be

    prepared to prove that the property was purchased with the intent to invest. If the

    replacement property is disposed of within a few months, the government is likely to question

    whether the purpose of the transaction was actually investment.

[7] In some cases, it is possible to defer all tax entirely, but in order for this to happen the

    replacement property must be of equal or greater value, equity, and debt than the property

    being sold. If not, the transaction, though registered as an exchange, will probably be

    partially taxable.

[8] The investor has 45 days from the closing of the relinquished property to identify

    replacement property. If the investor has not closed on the new purchase within the 45-day

    limit, he/she must be able to identify the property with a signed document that contains the

    address or exactly describes the property in question.

Other rules that apply in exchanges are the “Three Property Rule” which states that an investor may identify up to three properties without regard to their fair market value and the “200 Percent Rule” which states that the investor may identify any number of properties as long as their total fair market value doesn’t exceed 200 percent of the value of the previously owned property.

Another regulation pertaining to exchange properties has to do with time limits. Once escrow has closed on the relinquished property, the investor has 180 days from either the date of closing, or the date on which the investor’s tax return is due. This means that if an exchange is closing in the fourth quarter of the year, the taxpayer will have to get a tax file extension in order to fulfill the 180-day requirement.

As you can see, real estate law is complicated and extremely detailed. As difficult as some of the regulations and concepts may be to understand, they are often even more complicated to implement. This is why, if you are dealing with commercial real estate in Illinois,  M&A Law Firm, P.C. can be an essential component of your success. Our attorneys are not only skilled in legal matters, but in personal interactions. They will smooth your path whether you are buying, selling, or leasing business property. We can be reached by telephone or by filling out the contact form on our website.



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